Cloud becomes the golden child as Google reports yet more profit

When looking at the financial results of companies like Google, the question is not whether it has made money, but how much are the bank vaults overflowing.

Financial for the full year demonstrated slightly slowing growth, but few should worry about having to search the sofa for the pennies right now. Over the course of 2019, Google brought in $161.8 million, up 18.3% year-on-year, though it was YouTube and the Google Cloud business units as opposed to the core business which collected the plaudits from the management team.

“Revenues were 2.6 billion for the fourth quarter, up 53% year-over-year, driven by significant growth at GCP and ongoing strong growth and G Suite,” said Alphabet CFO Ruth Porat. “The growth rate of GCP was meaningfully higher than that of cloud overall. GCP growth was led by our infrastructure offerings and our data and analytics platform.”

Company Quarter Revenue (most recent) Year-on-year Growth
Google Cloud $2.6 billion 53%
Microsoft Intelligent Cloud $11.9 billion 27%
Amazon Web Services $9.9 billion 23%

Despite being a business unit which brings in an impressive $10 billion annually, it is impossible not to compare the performance of Google Cloud to AWS and Microsoft Azure. Google is realistically the only rival which can keep pace with the leading pair, though it does appear it is losing pace.

That said, the fortunes of the cloud are only beginning to be realised; this is a marathon not a sprint. Moving forward, the Google team believes strength in AI and software gives it an advantage to provide seamless experiences to users across multiple devices. There is also the blunt force approach to acquiring market share moving forward; Porat highlighted the objective is to triple the size of the cloud sales team.

Over at YouTube, the team is capitalising on the increasingly consumer appetite for video, though also what appears to be a more experimental attitude to subscription. YouTube TV is growing healthily at 2 million, while the core YouTube platform has more than 20 million music and premium paid subscribers.

This is positive momentum, though it will be interesting to see what impact partnerships have on these figures. Google is partnered with Verizon, forming a content option in its bundled products, though rivals are placing a much greater emphasis on these relationships, leaning on an already established link with the consumer, albeit sacrificing some profit in the process.

Perhaps these two business units demonstrate why Google is such an attractive company to investors and potential employees. The core business can do what it does, but Google is always searching for the next big idea. Google Cloud is arguably the most successful graduate of its ‘Moonshot Labs’ initiative, while YouTube is one of the biggest acquisition bargains at $1.65 billion in 2006. It now brings in more than $15 billion annually in ads sales.

During the earnings call, CEO Sundar Pichai pointed to some of the other investments which are absorbing the $26 billion annual R&D budget. Verily and Calico are linking together AI and cloud technologies to improve clinical trials, research, and drug development. Waymo is attempting to scale driverless vehicles in the US. Loon is another Moonshot graduate, endeavouring to stand on its own currently.

Google is one of the most interesting companies around, not only because it is a money-making machine, but the R&D business could produce some gems over the next few years.

The US election will test social media censorship to breaking point

Electoral losers are increasingly blaming social media for their failure, but this year will demonstrate that censorship is not the answer.

Democracy only works if the losers of elections accept defeat, but sadly few are inclined to do so these days. Now we have five stages of electoral grief that are directly analogous to the original Kübler-Ross model. We still have denial, anger and depression, but instead of bargaining we have litigation and acceptance seems to have been replaced with conspiracy theories in which social media plays a central role.

The central concern is that when the electorate votes for the other team it must be because they were mislead in some way, because no rational, fully informed person could fail to recognise the superiority of my team. In the past some blame could be attached to the mainstream media, something the UK Labour party still persists with. In the US, however, Donald Trump’s victory in 2016 despite having the support of no major media, would appear to render that theory obsolete.

Trump was able to prevail because politicians are no longer dependent on the old media to communicate directly with the electorate, thanks to social media. But this significantly lowered barrier to entry into the public sphere also provides fertile ground for electoral losers searching for mitigation and another bite at the cherry.

A favourite on both sides of the pond is to blame ‘the Russians’. While cold war fervour largely shifted its focus to China, Russia remains a strong source of bogeymen. Now it should be noted that there is plenty of evidence of social media bot farms originating from a number of countries, including Russia, that apparently seek to meddle in elections. What is much harder to prove is whether they had any effect on the outcome of elections whatsoever.

The small matter of evidence is never going to stand in the way of those refusing to concede defeat, however, and it has now become conventional wisdom that social media censorship is vital if we are to ever have untainted elections again. Since the US is in the middle of another of its interminable general election campaigns this year, the heat is being turned up on social media and they are being forced to respond.

Last week Twitter announced it was ‘turning on a tool for key moments of the 2020 US election that enables people to report misleading information about how to participate in an election or other civic event.’ The tweet implies the tool has a broader purpose than that, though, as it also includes intimidation and misrepresenting of political affiliation. Already you can see how a simple censorship objective becomes immediately and massively complicated under the weight of interpretation, semantics and generally chasing its tail.

Then you have Google and its subsidiary YouTube blogging about how much they ‘support’ elections, whatever that’s supposed to mean. Again a lot of this focuses on content that is intended to mislead voters, but since electioneering is biased by definition, surely all of it is intended to mislead to some extent. YouTube also reiterates its aim to promote ‘authoritative’ voices, which is code for establishment media and commentariat.

In contrast, Facebook Founder and CEO Mark Zuckerberg is increasingly pushing back on censorship, having tried and failed to walk that tightrope since the Cambridge Analytica scandal. Perhaps motivated by the prospect of an extra four years of Trump, who has made his feelings known on censorship, Zuckerberg is now turning all free speech absolutist on us. Whether that position will survive even the first engagement of the US electoral process remains highly debatable, however.

Early signs of the immense pressure these platform owners will come under are already appearing, with the Democrats mobilising supposed experts to ‘protect’ the electoral process. “Iowa’s first-in-the-nation caucus will mark the DNC’s greatest challenge so far in efforts to guard its presidential contenders from the same fate that befell Hillary Clinton in 2016 when her campaign was upended by a Russian-backed hacking and disinformation effort,” reports the Washington Post in depressingly partisan fashion.

If that WaPo piece is anything to go by everyone is going to be trying to manipulate not only the US Presidential election, but the Democratic primaries too, where non-establishment candidate Bernie Sanders is currently the front-runner. Presumably YouTube doesn’t intend to punish the country’s mainstream media for misleading the electorate, so it seems it will support democracy by censoring everyone else.

As ever, censoring free societies is a game of whack-a-mole, in which policy-making can never hope to keep up with the desire of its people to say what they want. Even if the social media companies are successful in their stated censorship objectives, which they won’t be, the team that loses will still blame them. So they might as well not bother and trust their users to sort the wheat from the chaff. Afterall, they’ve been doing that with mainstream media for years.

Twitter tries to find another way to solve the censorship dilemma

Social media giant Twitter is exploring the creation of an open standard that it hopes will provide the answer to the impossible question of censorship.

As you would expect the announcement was made by Twitter CEO via a tweet in which he announced the creation of a small team to develop an open and decentralized standard for social media. In the thread he cites some of the inspiration for the move as coming from an essay entitled ‘Protocols, Not Platforms: A Technological Approach to Free Speech’. The author of that essay has already written an article cautiously welcoming this move.

Right now all social media are siloed platforms providing their own technology and rules. That means they’re also in the impossible position of trying to censor the stuff their users publish in order to please other users as well as advertisers and regulators. Right now they face constant pressure from all three and, of course, can never please all of the people all of the time.

At the core of the dilemma, as the essay implies, is free speech and its opposite: censorship. Determining what speech is good and bad is inherently subjective and an impossible tightrope to walk. We have long argued that any attempt to do so is futile and that the best solution for social media platforms would be to throw themselves at the mercy of regulators, thus absolving themselves of responsibility for censorship decisions.

This move by Twitter seems to be an early investigation into the possibility of an alternative resolution by creating a basic social media protocol, of which it would by just one of the clients, that could serve as the foundation for a number of other platforms. All social traffic would take place over this protocol, but then individual platforms could implement their own unique rules about what content they allowed to be published.

It’s very early days and there are all kinds of reasons why it may never take off, but it seems like a step in the right direction. Right now social media companies are being regulated like platforms but as they increasingly curate the content they host are acting more like publishers. Unless they find a way of resolving this conundrum themselves, state authorities will end up doing it for them,

As if to illustrate the point YouTube has announced yet another update to its harassment policy, including ‘a stronger stance against threats and personal attacks’. This amounts to a ban on ‘veiled or implied threats’, ‘demeaning language that goes too far’ and ‘content that maliciously insults someone based on protected attributes’.

On the surface who could have a problem with action against threatening, demeaning and insulting speech, right? It’s only when you try to establish the precisely when speech crosses any of those lines that you see what a futile, subjective and censorious policy this is. Expect a further update within months after some one claims to be upset about something and then another soon after that. You never know, eventually YouTube might come around to this protocol business.

Android moves to replace Google Pay music app with YouTube Music

Google wants to make YouTube the default audio app on Android in the hope of boosting its chances of competing with Spotify.

Right now the default Android audio app is Google Play Music, which does try to get users to upgrade to Google’s subscription streaming service, but doesn’t do a very good job of it and is mainly used as the interface for accessing locally stored audio files. Rather than overhaul the way that upsell is managed Google has decided to merge it with the YouTube Music app.

Music videos are arguably the most popular type of content on YouTube, with the top 30 most viewed individual videos dominated by music. YouTube monetizes those via serving ads on the video, but it would rather people paid upfront to its premium subscription service, that offers ad-free playback, background play on mobile devices (without it the music disappears if you switch to another app) and even downloading.

YouTube premium has plenty of features, but Spotify is the incumbent streaming music service, so Google has to do something special to topple it. As politicians, regulators and anti-trust authorities around the world are increasingly sensitive to, in Android Google has an incredible powerful platform for upselling its other digital products and services and it seems to have decided YouTube Premium needs the power of Android to give it critical mass.

YouTube Music is your personal guide through the complete world of music—whether it’s a hot new song, hard to find gem, or an unmissable music video,” says the announcement, tellingly published on the YouTube blog. “Music fans on Android phones can now easily unlock the magic of YouTube Music, which will come installed on all new devices launching with Android 10 (and Android 9), including the Pixel series.”

The announcement also made it clear that Google Play Music will no longer be preinstalled, which seems like a precursor to it being replaced entirely. You can still access locally stored files through YouTube Music, but on first inspection the user interface is inferior to Google Play Music, so the company may face some push-back from users on that. We’ll leave you with the top 5 music videos ever on YouTube, bafflingly headed by the entirely mundane Despacito. Contrastingly Gangnam Style has lost none of its kitsch, tongue-in-cheek charm.

 

IBC 2019: Are the nuances of the content world being understood by telcos?

The traditional telco business model is being commoditised, this is not new news, but with more telcos seeking to drive value through content, do they understand the nuances of consumer behaviour?

Once again at IBC in Amsterdam, it is an OTT which is grabbing attention. This should come as little surprise considering the disruption which this fraternity is thrusting on the world of telecoms, media and technology, though here it is more than gratuitous. Cécile Frot-Coutaz, the head of YouTube’s EMEA business, outlined why these companies are leading the way; a fundamental and intrinsic understanding of today’s consumer and the consumer-driven market trends.

This is perhaps why the telcos and traditional media companies are struggling to adapt to a world dominated by millennials, generation Z and digital natives. They appreciate society is changing but have perhaps not correctly balanced the formula to fit cohesively and efficiently into the new paradigm.

This conundrum is most relevant in the content world. Telcos need to factor this complex and nuanced segment into the business model, but how, where, why and when is a tricky question. Many telcos want to do something completely new and very drastic, but the simplest ideas are often the best ones; how can connectivity be used to augment and enhance the fast-growing, fascinating, complicated and profitable content space?

From our perspective, telcos need to diversify, but the best way to do that is figure how connectivity can enhance growing businesses and segments. This might sound like an obvious statement, however the evidence is the nuances are being missed.

Take AT&T for example. This is a company which desperately wants to diversify to take advantage of the digital economy. One way in which it feels it can do this is through the acquisition of Time Warner, a $107 billion bet to own content, create a streaming platform and drive another avenue of engagement with the consumer. Sounds sensible enough, but why take such a risk when there are opportunities closer to home.

Another strategy is more evident in Europe where telcos are attempting to create partnerships with the streaming giants to embed the distribution of these services through their own platforms. See Sky’s integration of Netflix or Vodafone’s work with Amazon Prime. Again, it is a perfectly reasonable approach, but does this future-proof the business against the trends of tomorrow?

These are two approaches which will attract plaudits, but we would like to take the strategy closer to home once again.

During her presentation, Frot-Coutaz pointed to several trends which could define the content world of tomorrow, and it is a perfect opportunity for the telcos to add value.

Firstly, let’s have a look at the consumer of today and tomorrow. Millennials and Generation Z have fundamentally changed the way in which the media world operates, and content is consumed. Not only is it increasingly mobile-driven, but there are new channels emerging every single day. Technology is second-nature to these consumers, and this is shaping the world of tomorrow.

Another interesting point from Frot-Coutaz is the fragmentation of content. One of the objectives of YouTube is not only to own content channels, but to empower the increasing number of content creators who are emerging in the digital world. If the content creators make more money, so does YouTube.

Frot-Coutaz claims that the number of YouTube channels which generate more than $100,000 per annum has increased 30% from 2017 to 2018. These trends are highly likely to continue, further fragmenting the content landscape.

This is where owning content or embedding popular streaming services into platforms becomes problematic. Consumer trends suggest the variety of channels through which the user is consuming content is increasing not decreasing. Embedding Netflix into a platform is an attractive move, but it is only attractive to those who have an interest in Netflix. If connectivity solutions can be offered to consumers to simplify and enhance the consumption of content, agnostic of the platform, there is a catch-all opportunity.

Although Netflix and Amazon Prime might be the content platforms on everyone’s lips for the moment, the number of ways in which consumers engage content is gathering significant momentum. There are new challengers in the streaming world (Disney+ or Apple TV), traditional social media (Facebook or Twitter), challenger social media (Tik Tok) AVOD channels (YouTube), traditional conversational websites (Reddit), messaging platforms and who knows what else in the 5G era. What about the VR/AR platforms which could potentially emerge soon enough?

This is a nuance, not a drastic change in thinking, but it is an important one to understand. Do telcos want to be the owner of content, the distributor or the delivery model. Admittedly, the delivery model is not the sexiest in comparison, but it might hold the most value in the long-run.

Another way to think about this taking the example of Killing Eve, the BBC spy thriller. Is there more long-term value in the eyes of the consumer in owning the content, owning the distribution channel or owning the connectivity services which fuel consumption and engagement through all channels?

The best means of differentiation have always been the ones which are closest to home. If you look at the likes of Google, Microsoft and Amazon, these are future-proofed companies because they are taking their current services and creating contextual relevance. There might be examples which undermine this point, but the general claim holds strong.

At Google, the team diversified their business through the acquisition of Android. This evolution took Google from the PC screen and onto mobile, but it is an extension of the advertising business model in a different context. The same could be said about YouTube. A video platform is drastically different from a search engine, but the underlying business model is the same; identifying the needs of the consumer and serving relevant commercial content.

The telcos are looking to do the same thing, but perhaps there needs to be more of a focus on a proactive evolution of the business rather than reactive. The telcos are playing catch-up on the consumption of video through mobile and a shift to OTT distribution, but the current approach is perhaps too narrowly focused. Focusing on the core business of connectivity delivery is more of a catch-all approach, factoring in future trends and the increasingly fragmented digital society.

This is a very easy statement to make, the complications will be on creating products which encapsulate these trends and offer an opportunity for telcos to grow ARPU. We are sitting very comfortable in the commentary box here as opposed to in the trenches with the product development teams, but the nuances of content are there to be taken advantage of.

Is $170 million a big enough fine to stop Google privacy violations?

Another week has passed, and we have another story focusing on privacy violations at Google. This time it has cost the search giant $170 million, but is that anywhere near enough?

The Federal Trade Commission (FTC) has announced yet another fine for Google, this time the YouTube video platform has been caught breaking privacy rules. An investigation found YouTube had been collecting and processing personal data of children, without seeking permission from the individuals or parents.

“YouTube touted its popularity with children to prospective corporate clients,” said FTC Chairman Joe Simons. “Yet when it came to complying with COPPA [the Children’s Online Privacy Protection Act], the company refused to acknowledge that portions of its platform were clearly directed to kids. There’s no excuse for YouTube’s violations of the law.”

Once again, a prominent member of the Silicon Valley society has been caught flaunting privacy laws. The ‘act now, seek permission later’ attitude of the internet giants is on show and there doesn’t seem to be any evidence of these incredibly powerful and monstrously influential companies respecting laws or the privacy rights of users.

At some point, authorities are going to have to ask whether these companies will ever respect these rules on their own, or whether they have to be forced. If there is a carrot and stick approach, the stick has to be sharp, and we wonder whether it is anywhere near sharp enough. The question which we would like to pose here is whether $170 million is a large enough deterrent to ensure Google does something to respect the rules.

Privacy violations are nothing new when it comes to the internet. This is partly down to the fragrant attitude of those left in positions of responsibility, but also the inability for rule makers to keep pace with the eye-watering fast progress Silicon Valley is making.

In this example, rules have been introduced to hold Google accountable, however we do not believe the fine is anywhere near large enough to ensure action.

Taking 2018 revenues at Google, the $170 million fine represents 0.124% of the total revenues made across the year. Google made on average, $370 million per day, roughly $15 million per hour. It would take Google just over 11 hours and 20 minutes to pay off this fine.

Of course, what is worth taking into account is that these numbers are 12 months old. Looking at the most recent financial results, revenues increased 19% year-on-year for Q2 2019. Over the 91-day period ending June 30, Google made $38.9 billion, or $427 million a day, $17.8 million an hour. It would now take less than 10 hours to pay off the fine.

Fines are supposed to act as a deterrent, a call to action to avoid receiving another one. We question whether these numbers are relevant to Google and if the US should consider its own version of Europe’s General Data Protection Regulation (GDPR).

This is a course which would strike fear into the hearts of Silicon Valley’s leadership, as well as pretty much every other company which has any form of digital presence. It was hard work to become GDPR compliant, though it was necessary. Those who break the rules are now potentially exposed to a fine of €20 million or 3% of annual revenue. British Airways was recently fined £183 million for GDPR violations, a figure which represented 1.5% of total revenues due to co-operation from BA during the investigation and the fact it owned-up.

More importantly, European companies are now taking privacy, security and data protection very seriously, though the persistent presence of privacy violations in the US suggests a severe overhaul of the rules and punishments are required.

Of course, Google and YouTube have reacted to the news in the way you would imagine. The team has come, cap in hand, to explain the situation.

“We will also stop serving personalized ads on this content entirely, and some features will no longer be available on this type of content, like comments and notifications,” YouTube CEO Susan Wojcicki said in a statement following the fine.

“In order to identify content made for kids, creators will be required to tell us when their content falls in this category, and we’ll also use machine learning to find videos that clearly target young audiences, for example those that have an emphasis on kids characters, themes, toys, or games.”

The appropriate changes have been made to privacy policies and the way in which ads are served to children, though amazingly, the blog post does not feature the words ‘sorry’, ‘apology’, ‘wrong’ or ‘inappropriate’. There is no admission of fault, simply a statement that suggests they will be compliant with the rules.

We wonder how long it will be before Google will be caught breaking privacy rules again. Of course, Google is not alone here, if you cast the net wider to include everyone from Silicon Valley, we suspect there will be another incident, investigation or fine to report on next week.

Privacy rules are not acting as a deterrent nowadays. These companies have simply grown too large for the fines imposed by agencies to have a material impact. We suspect Google made much more than $170 million through the adverts served to children over this period. If the fine does not exceed the benefit, will the guilty party stop? Of course not, Google is designed to make money not serve the world.

YouTube flexes its editorial muscles

As video sharing service YouTube strives to censor ever more rigorously, can it still be considered a neutral platform?

Social media platforms are exempt from many of the rules and regulations that govern the media because they don’t exercise editorial control over what is published on them. Every time they move to censor some types of content and favour others, however, that status comes into question.

Last week YouTube CEO Susan Wojcicki published a blog titled Preserving openness through responsibility, in which she argued that it was vital for YouTube to be as open as possible and that the only way to guarantee that was to get rid of any content it doesn’t like. Wojcicki characterised this censorship as ‘responsibility’ and explained that it’s comprised of four other Rs that are explained in the graphic below.

YouTube Rs

Clearly proud of its removal efforts, YouTube wasted little time in blogging about its removal efforts. Featuring liberal use of conveniently nebulous and ill-defined terms such as ‘inappropriate’ and ‘problematic’ the blog details YouTube’s constant meddling with its own policies and the increasing vigour with which it enforces them by taking down content and kicking creators off the platform in the name of openness.

YouTube removal

Of course YouTube does have to exercise some control over its platform, for example the removal of illegal content. The problem for creators and YouTube’s own claims of openness is thatits policies extend far beyond preventing illegality, are arbitrary and are getting stricter by the day. Protecting its advertisers by demonetizing edgy content is one thing, but there has to be a point at which the imposition of a strict and comprehensive set of editorial parameters on its creators means YouTube can no longer be considered a platform and is thus legally responsible for every piece of content it publishes.

Google ditches subscription model for YouTube Original content

Google tried to make the transition over to a subscription-led business and now it seems it has had enough, announcing all YouTube Original content will be free after September 24.

Although the subscription business model is very attractive to the money-men, it was always going to be a tough sell for Google and YouTube. Not only have users become accustomed to free content through the platform, it is also far removed from the core competency of the Google money-making machine.

It now appears the experiment has not worked, with Google announcing all YouTube original content, movies and live events released on September 24th and beyond will be free to view.

There will of course be a subscription model still available for users. For $12 a month, ads will be removed, content can be downloaded for offline viewing, all episodes of a series will available from the beginning and users can expect bonus material also.

It doesn’t seem to be completely giving up on the idea of subscriptions, but this represents a more back the traditional from Google.

Google is very good at a number of different things, but top of the list is hyper-targeted advertising. Like Facebook, Google specialises in collecting and analysing information on a user before presenting the right type of content. Some might question the appropriateness and relevance of some of the ads, but you only have to look at how good the Google search engine actually is to realise it does know what it’s doing.

This is why the transition to subscription-based revenues on YouTube was a slightly unusual move. Firstly, Google is really good at making money through serving relevant ads at the right time, so why change this. And secondly, YouTube users are accustomed to getting content for free, why would they want to pay?

Perhaps this is why it has been a struggle to collect subscriptions to date. YouTube users are used to a certain experience, and maybe do not feel YouTube Original content warranted a price tag. Google was asking users to pay for content, without really owning a track record of creating price tag worth content.

This is not necessarily the end of the subscription ambitions for Google and YouTube, but it does impose a different mentality on the business. It takes the platform back into the realms of targeted advertising, a practice which has made Google billions upon billions, and also allows the team to broaden the audience.

Without a paywall to hide content behind, the YouTube Originals will be viewed by more people. More opinions can be nurtured and more of a reputation can be created. As it stands, Google or YouTube does not have a positive or negative reputation for making content. Eyeballs are important when going up against the likes of Netflix, HBO, Disney and Sky, and now Google can ensure people can form an opinion on its content.

If Google wants to transition YouTube across to a subscription-based business model, it will have to demonstrate why people should pay to access content. Perhaps it forgot to do that in the first place.

The UK is turning to VoD – Ofcom

Half of UK homes now subscribe to TV Streaming services, reveals a new Ofcom report, as the country increasingly opts for video-on-demand.

The precise proportion is 47%, which is lower than some might expect given the apparent ubiquity of Netflix, Amazon Prime, etc, but still a significant jump from 39% just a year earlier. Furthermore, since many people have more than one service, the total number of subscriptions increased by 25%. If this keeps up it won’t be long before nearly all of us spend our evenings consuming copious amounts of VoD.

This is the headline finding from Ofcom’s latest Media Nations Report, which takes a deep look at the country’s media consumption habits. Any parent won’t be at all surprised to hear that younger people far prefer on-demand video over traditional broadcast and, as a result, consumption of the latter is in rapid decline. Thanks to the oldies broadcast telly is still the most popular form of video consumption, but not for long.

ofcom media nation all video

ofcom media nation all video 16-34

ofcom media nation all video change

ofcom media nation all video change 16-34

“The way we watch TV is changing faster than ever before,” said Yih-Choung Teh, Strategy and Research Group Director at Ofcom. “In the space of seven years, streaming services have grown from nothing to reach nearly half of British homes. But traditional broadcasters still have a vital role to play, producing the kind of brilliant UK programmes that overseas tech giants struggle to match. We want to sustain that content for future generations, so we’re leading a nationwide debate on the future of public service broadcasting.”

The UK state seems to be in a mild panic about the decline in viewership of what it considers to be public service broadcasting, which means any old rubbish that’s publicly-funded. It’s highly debatable how much of the content produced by the BBC provides any kind of public service other than distracting us for a few minutes, but Ofcom seems to still think it’s really important.

This last table is especially illustrative of the current state of play, with younger adults all about YouTube and Netflix. If Ofcom had surveyed teenagers we suspect that bias would have been even more pronounced and as these trends continue the TV license fee is going to become increasingly hard to justify.

ofcom media nation all video minutes

YouTube creators unionize to combat demonetization and censorship

In its desperation to placate corporate advertisers YouTube has antagonized many of its independent creators, but now they’re fighting back.

YouTube has to strike a delicate balance between the needs of independent creators, who generate most of its traffic, and corporate advertisers, who provide most of its revenue. For the past couple of years, whenever an advertiser has complained about a type of content, YouTube has usually moved to ensure that content has no ads served on it – demonetization. Since a cut of ad revenue is often the sole source of income for the YouTuber, this can have devastating consequences.

More rarely YouTube will also censor entire videos or even ban certain creators from the platform entirely. Recently YouTube’s apparent decision to side with Vox journalist Carlos Maza in a dispute with YouTuber Stephen Crowder, and subsequently impose fresh censorship rules, led to further claims of bias against independent creators, despite its CEO’s claims to the contrary.

Now we have the news that an obscure ‘YouTubers union’ has joined forces with IG Metall – Germany an Europe’s largest industrial union, to form the campaigning group FairTube. This is remarkable for a number of reasons, not least because the digital world has seemed to have no place for trades unions until now.

FairTube has called for the following from YouTube and given it until 23 August to engage with it, or else.

  • Publish all categories and decision criteria that affect monetization and views of videos
  • Give clear explanations for individual decisions — for example, if a video is demonetized, which parts of the video violated which criteria in the Advertiser-Friendly Content Guidelines?
  • Give YouTubers a human contact person who is qualified and authorized to explain decisions that have negative consequences for YouTubers (and fix them if they are mistaken)
  • Let YouTubers contest decisions that have negative consequences
  • Create an independent mediation board for resolving disputes (here the Ombuds Office of the Crowdsourcing Code of Conduct can offer relevant lessons)
  • Formal participation of YouTubers in important decisions, for example through a YouTuber Advisory Board

Exactly what FairTube will do if YouTube doesn’t play ball is unclear. Traditional industrial action is unlikely as it’s hard to see how they could get YouTubers to down tools in sufficient numbers to have a significant effect on YouTube traffic. But in the latter half of the video below you can see that FairTube has three avenues it thinks it could pursue to escalate.

  1. Contesting the status of YouTube creators as self-employed, thus creating a greater duty of care on YouTube towards its creators.
  2. Claiming GDPR violations due to YouTube’s refusal to give creators the data it stores about them and which it does share with advertisers.
  3. Old fashioned collective action – not so much striking as spreading the word and joining the union to put collective pressure on YouTube and its own Google.

 

Unstated but baked into this last point is the growing regulatory and antitrust pressure being put on all internet platforms, not least by US president Donald Trump. Meanwhile the European Union, while having the turning circle of a supertanker, can impose some pretty severe sanctions when it gets its act together. We’ll leave you with YouTuber Tim Pool’s analysis of the move.